YOUR COMPANY IS LOOKING FOR ASSET-BASED FINANCE!
CAN AN ASSET-BASED LOAN BE YOUR BUSINESS CREDIT SOLUTION?
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Business credit line needs can often leave the Canadian business owner and financial manager feeling ' left out. 'Asset-based financing via an ' ABL ' line of credit can easily be called the ' better way. ‘Let’s dig in.
ASSET BASED LENDING SECURES ASSETS FOR TRUE WORKING CAPITAL NEEDS
Asset-based lending, in our case in the form of a working capital facility, is the ultimate ' secured lending. ' A laser-like focus on your fixed assets and current asset accounts receivable and inventory, as well as real estate transforms the true value of those assets into ongoing cash flow.
ABL IS THE 'NON-BANK' SOLUTIONS
It's that value in your business assets that allows companies in pretty well any industry in Canada to benefit from what we term a 'non-bank line of credit. ' ABL grew out of the popularity of this business financing solution from the united states.
EVERY INDUSTRY PARTICIPATES IN ASSET FINANCING SOLUTIONS
Almost any industry can benefit from Asset-based financing, and in fact, many industries seem almost perfectly positioned to use this type of borrowing. That includes manufacturing companies, wholesaling firms, retailers with inventory financing needs, and even tech companies.
WHAT IS THE DIFFERENCE BETWEEN BANK LENDING AND ABL LENDING?
The essential difference between a Canadian chartered bank line of credit and an asset-based financing facility is asset-based (ABL), and one is more cash flow-focused (the bank!). Bank facilities typically have ‘caps,’ aka limits on the facility. The asset-based credit line is more, shall we say, 'elastic' in nature and really grows or contracts relative to your sales and working capital accounts.
Asset-based lenders do take a strong look at your financial statements, but they view them in the context of sales and assets versus how a Canadian chartered bank might view your financials.
BANK REQUIREMENTS FOR CREDIT LINES
Many companies, for a variety of reasons, can't meet the stringent requirements of bank credit lines - which comes with meagre rates, but requirements that are often onerous for firms that are in various stages of their life - that might be a turnaround scenario, or coming off a difficult year, or surviving, but paying the price of a one time incident such as the loss of a contract or key personnel.
Those above-mentioned typical scenarios don’t allow firms to meet cash flow and balance sheet ratios required by bank lending. In some cases, many companies are subject to seasonality and cash flow 'bulge' requirements. It's the ability to also incorporate other assets into your credit line that assist in financing those 'bulges' in cash flow needs - seasonal or otherwise.
CONCLUSION
Interest rates on ABL asset-based lines of credit will always vary - Because asset-based financing for credit lines and asset-based loans, in general, are almost always more expensive, it's often a bridge to other financing forms; think of it as a solid business band-aid. If you're focused on getting business credit that meets your cash flow and financing needs seek out and speak to 7 Park Avenue Financial , a trusted, credible and experienced Canadian business financing advisor who can assist you with your asset-based financing needs.
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Stan Prokop
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